George Osborne’s fairness claim torn apart by graph

George Osborne's fairness claim torn apart by graph

This distributional graph of the benefit freeze (blue) and personal allowance measures contained in the budget (red) shows how regressive both measures are.

As you can see, changes to welfare his those nearest the bottom (the blue bars on the left), while the personal tax allowance benefits those at the upper end of the income scale (see the red bars on the right).

(Source: IPPR)

As you can see, it was one of the most regressive budgets of recent times.

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21 Responses to “George Osborne’s fairness claim torn apart by graph”

  1. Ash

    “the government does not elect that a certain amount of tax is to be raised, and then volitionally determines who pays those taxes. The government sets certain rates of taxation on certain activities, and then who pays taxes is determined by who participates in those activities.”

    Well… sort of, but obviously the government has to take a view on how large the overall tax burden should be and on whom it should fall, based on reasonable assumptions about what activities people will participate in given the incentives and disincentives that are in place.

    “A person with a low income who spends every last penny they have on VAT-able goods pays more tax than someone on the same income who saves their money and only buys the essentials.”

    Yes, but there’s still a matter of fact about the tax burden low-income people typically face from VAT, fuel duty, alcohol duty etc. Just saying “if you don’t want to pay it, give up your car, stop drinking and only buy VAT-exempt food” seems a bit… well, your word was “callous”.

    “Only having income taxation is desirable from a ‘progressive’-‘regressive’ point of view”

    Actually there’s a case to be made that a truly progressive tax system would focus a lot more on wealth and a lot less on income – *earned* income, anyway – but that’s a whole different argument from the ones around tax cuts vs. tax credits and income tax vs. VAT.

  2. Anthony Masters

    There are indeed reasonable assumptions in place for taxable activities.

    I apologise if my comment appeared callous – it was just an example of when people on the same income have different tax burdens. I would certainly prefer indirect taxation to be reduced, as well as a reduction of the overall tax burden, but I doubt we agree on that. Thanks for the discussion.

  3. Ash

    You have nothing to apologise for Anthony, and it has been my pleasure to encounter such a model of civility online where one least expects it!

  4. Ash

    You have nothing to apologise for Anthony, and it has been my pleasure to encounter such a model of civility online where one least expects it!

  5. Ash

    You have nothing to apologise for Anthony, and it has been my pleasure to encounter such a model of civility online where one least expects it!

Comments are closed.